Disputes among your workforce can diminish productivity, increase stress, and even lead to disruptive outbursts and litigation.

By Christopher Freeburn

Disputes between individual employees and between employees and their bosses can erupt in any office situation, large or small. But in small offices the magnitude of any interpersonal friction is greatly exacerbated by the close proximity in which the staff works.

According to data from the Dana Mediation Institute, unresolved conflicts between employees account for as much as 65 percent of downturns in workplace performance. Worse, the institute calculates that a whopping 42 percent of a disgruntled employee's work time can actually be spent arguing over the disagreement, or trying to fix it. That's a considerable amount of time lost to squabbling and score settling. What's more, studies show that disgruntled employees tend to have higher turnover and absentee rates, are more likely to engage in workplace theft, and get injured on the job more frequently than satisfied employees.

The first step to dealing with a conflict between employees is simply recognizing that it exists. Small business owners are often so involved in the daily operations of their businesses that they can fail to notice tension brewing right outside their office door. "Make sure that employees feel comfortable coming to you with problems," advises management consultant, C. Davis Fogg. "The best way to do that is to listen carefully and not dismiss any complaints out of hand." Fogg says that employers who cultivate an aura of approachability will be more aware of potential conflicts between their employees before they escalate into nasty confrontations.

Sources of Office ConflictConflicts among workers can arise from any number of sources, including:

Competition - Even in small businesses, employees compete with each other for responsibilities and job advancement. In fact, competition among employees can be even more intense in a small office than in a larger firm since small business employees generally have a greater range of responsibilities and discretion, all while working in close proximity to their boss. (For more on how to manage competition in the workplace, see Part III of our series "Motivating Your Employees".

Office Demographics - The rapid diversification of the U.S. population means that many offices, large and small, are now composed of staff from divergent ethnic, cultural, and religious backgrounds. Such diversity does not automatically translate into harmony. In fact, it can make misconstrued statements and unintentional slights more common, since all employees may not share the same cultural background.

Family Discord - Employees who are having problems at home often bring those difficulties into the workplace by becoming irritable, combative, and distracted.

Personality Conflict - People have naturally differing temperaments, which are not always complementary. An easy-going, gregarious, talkative employee may irritate his taciturn, quiet, introverted co-worker. The worker who constantly procrastinates may find herself at odds with the colleague who insists on consistent, steady performance.

Loss of Control - Working with others means surrendering some level of control over our actions. Some people find it difficult to accept the opinions or directions of others. This can be a problem for small firms that are expanding. Older employees may resent the loss of responsibilities that they formerly held to newly added employees.

Miscommunication - Failure to clearly communicate underlies most office conflict. An offhand gesture or comment may be misunderstood. A decision to reorganize some aspect of the firm's business may be misinterpreted as a rebuke by the affected employees if not properly explained.

Mediating a Conflict

Personal conflicts among your employees can lead to a hostile workplace, reducing productivity and possibly driving away valuable employees. If you discover a conflict among your employees, here are some simple steps to take to resolve the issue:

1.) Identify the problem. Assemble all the parties involved and ask each employee to explain the conflict from his or her point of view.

2.) Listen carefully to each party. Don't assume you know what the problem is before you hear what they have to say. Assumptions can bias how you interpret what your employees tell you.

3.) Remain impartial. Don't take sides. You can only gain the trust of those involved in the conflict if they perceive you as being a neutral party, not leaning toward one side or the other. If achieving this perception of neutrality is difficult or impossible to achieve--like, say, if one of the disputed parties is a family member and the other is not--then it might be necessary to go outside the company and hire a third-party mediator or arbitrator to resolve the problem.

4.) Keep the discussion focused on the problematic behavior or situation--not on the individuals involved. Avoid accusatory language that seeks to lay blame on any party.

5.) Ask each party if he or she understands what the other has said. Having each party restate the other's position is a helpful way to make certain each has heard and can show some empathy for the other side.

6.) Ask the parties what they think would be the best solution for the conflict. Ask detailed questions of all parties. Some compromise should be demanded of every party.

7.) Follow up. Once a solution has been agreed upon, speak with each party in the days and weeks following the resolution to make certain they are satisfied with the outcome.

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